Can I install onto an external hard drive + run off it?

Can I install onto an external hard drive + run off it?
If possible, will the system run at the *same* speed as the built in hard drive?
ALSO: Am I correct in saying that if I replace my current hard drive with an SSD one?
If so: that *****  
Thanks
Omar

OS X doesn't matter what disk you boot from, as long as it can be formatted properly in Disk Utility. You can boot from a USB stick drive if it's big enough.
Thunderbolt would be the fastest, the drive would be the limiting factor there. You can find Thunderbolt drives like these at stores like macsales.com. But USB 3 might also feel fast enough.
If you have boot systems installed on many drives connected to your Mac, the way you tell the Mac which one to use is to hold down the Option key at startup. This will present icons of all the connected drives you can boot from, then you just pick one and go.

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